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It’s strange to say that there are stocks that have outperformed Apple over the last three years, but it’s true. Among these freaks of nature stands Las Vegas Sands, majority owned and operated by billionaire Sheldon Adelson who over the last five years has seen his fortune drop from to $28 to $3 billion, and now back up to $25 billion. Las Vegas Sands has thrived as it became a “growth stock” on the back of its operations in Asia, but Adelson now has a new target: Spain.

Las Vegas Sands has made clear its intention to develop what has come to be known as EuroVegas, a project about half the size of the Las Vegas Strip that seeks to capitalize on substantial business that is tourism in Europe. As Forbes’ Steve Bertoni reported, the casino-mogul is looking to continue expanding his gambling empire after his successful stint in Macao and Singapore.

Adelson is negotiating with Spain’s two largest and most important cities, Madrid and Barcelona, for a territory of 800 to 1,000 hectares to develop the 12 resort-project (36,000 rooms). The project includes 6 casinos (with 1,065 tables and 18,000 slot machines), 9 theaters and a larger “stage” with seating capacity of 15,000, and up to 3 golf courses, according to a study by the Boston Consulting Group, quoted by Spanish Daily El Pais.

Only a few weeks ago, Adelson raised his total estimate for the project to €26.7 billion ($35.3 billion); Las Vegas Sands would incur equity risk for only $4 billion, though. Analysts at UBS noted the casino-mogul and his management team avoided talking about the potential size of the Spanish (and European market) in their latest earnings call, but noted the project would cost LVS $8 to $12 billion (“spread over 9 years [while] each phase would generate cash flow to fund the next phase”).

Each of the three phases would see 4 resorts and 2 casinos being built (every 2 years), with each resort costing between €1.9 and €2.9 billion ($2.5 to $3.8 billion), according to El Pais. This would create 164,000 jobs directly and 97,000 indirectly, the company said during negotiations, figures disputed by the Spanish government.

Negotiations are ongoing, and the company hasn’t announced where EuroVegas will be built. Adelson came in with a big list of conditions he sought to impose including labor market reform, preferential tax treatment, and the lifting of a ban on smoking tobacco in closed areas to allow for smoking lounges. While political resistance exists, it has eased as the crisis in Spain has intensified, with the Socialist Party (of former Prime Minister Jose Luis Rodriguez Zapatero) looking upon EuroVegas with more favorable eyes.

Initially, Adelson didn’t want to pay state, regional, and municipal taxes. He also wanted to be taxed like other international companies in Spain. El Pais reports that Apple takes 99% of its Spain profits from its European HQs in Ireland (as does Google, which actually reported an operating loss in 2010), while Amazon’s profits are debited in Luxembourg, where tax rates are lower. Las Vegas Sands is seeking these advantages, but won’t be able to avoid municipal taxes (which include real estate, construction, and income taxes), according to El Pais.

Analysts at Nomura note that markets hate uncertainty, and that the lack of an announced decision on the project could weigh on the stock. Management appeared unjustifiably defensive on the earnings call, the analysts say despite a good quarter and the positive prospects of a combination of potential growth projects. Nomura remain bullish on the stock, as earnings power hasn’t changed meaningfully and downside appears limited.

With the decline of Las Vegas over the last decade, the hotel and casino business moved to Asia. Macao is now the world’s largest gambling hub, while Singapore continues growing fast. Beyond Las Vegas Sands, other major players in the sector like Wynn Resorts, Melco Crown, MGM, and Stanley Ho’s SJM Holdings have important properties in Macao and around Asia.

Adelson is moving one step ahead. The billionaire is placing a bet on Europe, despite the current dire state of the EU. Adelson knows a thing or two about risky bets, having seen his fortune rollercoaster up and down over the years. Now that he’s back on top, he’s trying to keep the momentum going.

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Great story but I just wanted to add some information. Adelson is negotiating on 800 to 1000 hectres in Spain. That means 800 hec = 1976.843 acre or 1976 acre and 4080.3 yd². The 800 hectres is in Barcelona and on the beach. That area is twice the size of Central Park in New York. Madrid could get the 2020 Olympics and that area is 1000 hectres = 2471.053 acre or 2471 acre and 260.4 yd². Spain will be a great location. Adelson has an air force to fly millionaires in from all over the world. This will be a must see just like Singapore and Macau and Vegas.

The Marina Bay Sands has 10,000 employees for 2,561-room’s and the casino. EuroVegas will have 36,000 rooms and 12 casinos .Based on that you would need 140,570. workers if the Marina Bay Sands was the model you used . The Venetian Macao is the largest in the world and has a staff of approximately 12,000 on site. The number of paid employees in Macao’s gaming sector reached 50,198 at the end of 2011 and the total number of employees for Las Vegas Sands is 40,000 so the number of employee’s needed for operating EuroVegas is hard to pin down.The Marina Bay Sands has three towers each with 854 rooms that stand 626 ft in the air. To have 36,000 rooms you would need 42 towers like the Marina Bay Sands instead of three. If you take the lake in front of the Bellagio and put it on the property Spain is giving to Adelson you could put 250 of those lakes on this location.You can put two Central Parks with 300 acres left over on the location. Las Vegas Sands is going to be a much bigger company in the next three years. As Brody said in JAWS “You’re gonna need a bigger boat”.

Interesting point. As the other commentator explained, Adelson is negotiating for a very large terrain, way larger than he needs (plans show he needs 300 hectares for what he’s planing to build, vs 800 to 1000 he’s gonna get). That means he’s either looking to build more or sell/lease that space to others.

This is probably speculation but the intent on scoring more land than required is to corner the limitation that everyone has had in Macau i.e. Land Parcels and lengthy process to attain it.

By cornering such an extensive piece of land if the Euro Vegas picks up then Las Vegas Sands will be holding on prime land to develop and expand leaving the competitors far far behind.

He has pulled a similar deal in Singapore whereby Sheldon wanted only Marina Bay Sands to be the only legitimate casino in Singapore while govt. has allowed just only one more casino to be built in competition but it still fades in comparison to MBS. I have just visited the property along with meeting the management at the time of their recent public earning conference.

That’s an interesting possibility, and sounds very logical. He did say, in a great interview to my colleague Steve Bertoni (check it out on the left side links, the vest pocket) that he wanted to do in Spain what he couldn’t finish in Macau, indirectly mentioning the space constraint.

I will try this again so you can get an idea of THREE THOUSAND SIX HUNDRED ROOMS. The Bellagio, with 3,015 rooms, has 36 floors and a height of 508 ft so you need 12 of those. Three golf courses take up 350 to 450 acres. Roads ,casinos, and convention halls will take more space. Adelson needs the space for the biggest Integrated Resort in the world. He will have the only one in the area for 10 to 15 years. The 3 golf courses and one to three casinos could be up in 3 to 4 years. That would use over 1200 acres and he would still have 9 Integrated Resorts to build. You can put two Central Parks with 300 acres left over on 2000 acres. The size is hard to understand but he needs the room.